Fights Break Out at Gasoline Stations in Texas, Florida

Supply constraints can turn out to be self-perpetuating. When drivers fear a gasoline shortage may emerge, they will resort to panic buying.

The two hurricanes that recently struck the U.S. triggered disruptions on the country’s gasoline fuel supplies. A number of gasoline stations in Texas ran out of fuel due to refinery outages, and Florida saw supply shortfalls, too, when motorists scrambled to fill up their tanks during the evacuation ahead of Hurricane Irma.

Like a scene out of the movie Zoolander, fights have occurred at gasoline stations in hurricane-affected areas.

Supply constraints can turn out to be self-perpetuating. When drivers fear a gasoline shortage may emerge, they will resort to panic buying. This surge in demand may in fact actually lead to a shortage, which exacerbates discontent and anxiety among consumers.

Worries about fuel shortages sparked ire and fear in drivers, and some resorted to violence in their quest for fuel. In Miami, for instance, one man was caught on camera pulling a gun on another motorist at a gas station. The man with the gun did not shoot, but it showed an extreme case that developed from the spate of panic buying. Even though most gas station conflicts did not include guns, the evacuation from Florida facilitated a number of fights and dry fuel pumps. CBS News reported that gasoline shortages were “rampant” ahead of the storm.

One driver told the AFP that she had “heard rumors of fights breaking out at gas stations, and experienced a tense standoff herself when two drivers blocked her in at a pump, each wanting to fill their tanks after her and each refusing to yield and allow her to exit. Eventually, one relented.”

Florida Governor Rick Scott, understanding the magnitude of the situation, asked state law enforcement to escort trucks carrying gasoline. The Department of Homeland Security waived the Jones Act for areas impacted by the storms, allowing foreign-flagged vessels to transport fuel from one U.S. port to another. Even though these measures provided some relief, long lines persisted at gas stations during the evacuation.

In one circumstance, a driver threatened to slash the tires of one customer who cut in line at a station in San Antonio.

In Texas, after Hurricane Harvey, shut-in refineries, pipelines going offline, power outages, and flooded roads caused supply shortfalls at gas stations throughout the state. In one circumstance (caught on YouTube here), a driver threatened to slash the tires of one customer who cut in line at a station in San Antonio. The scene catches drivers honking their horns, using profanity, and bickering with each other. In Dallas, one man grabbed a pump from another and poured gasoline on the other’s car. Local news covered the incident. “The fuel shortage, along with price spikes, are causing long lines at the gas pump and tensions as some gas stations (temporarily) ran out of fuel,” said one local TV station after describing the stand-off between the two men at the 7-Eleven.

Gasoline prices rise, but level off

Hurricane Harvey caused the closure of as much as 20 percent of U.S. refining capacity, reducing the amount of gasoline available to consumers. Despite the lost supply, the U.S. is not currently experiencing a shortage of gasoline supplies, but localized areas have dealt with supply crunches because of logistical bottlenecks.

Not only did consumers in Texas have to contend with long lines and possible station outages; they also saw prices rise sharply. Texas typically enjoys lower fuel prices than most of the country due to the fact that 31 percent of U.S. refining capacity operates in the state. In the aftermath of Hurricane Harvey, however, pump prices in Texas saw the largest increase nationally, rising by 40 cents per gallon from August 28 to September 4.

Gulf Coast refinery runs are still 3.6 million barrels per day (31 percent) lower than pre-Harvey levels, while power outages and impassable roads could continue to affect gasoline supplies in Florida.

Both states are starting to see a shift back to the status quo. However, Gulf Coast refinery runs are still 3.6 million barrels per day (31 percent) lower than pre-Harvey levels, while power outages and impassable roads could continue to affect gasoline supplies in Florida. U.S. retail prices for regular unleaded have now leveled off at $2.65 per gallon, according to AAA, up 30 cents per gallon versus a month ago. When compared to year-ago levels, gasoline prices are 22 percent higher, the result of OPEC supply cuts, high demand, and recent storm-related refinery outages. U.S. gasoline inventories declined last week by 8.4 million barrels, the largest weekly fall on record, but they still remain in the five-year range.

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The Fuse is an energy news and analysis site supported by Securing America’s Future Energy. The views expressed here are those of individual contributors and do not necessarily represent the views of the organization.

Issues in Focus

Safety Standards for Crude-By-Rail Shipments

A series of accidents in North America in recent years have raised concerns regarding rail shipments of crude oil. Fatal accidents in Lynchburg, Virginia, Lac-Megantic, Quebec, Fayette County, West Virginia, and (most recently) Culbertson, Montana have prompted public outcry and regulatory scrutiny.

2014 saw an all-time record of 144 oil train incidents in the U.S.—up from just one in 2009—causing a total of more than $7 million in damage.

The spate of crude-by-rail accidents has emerged from the confluence of three factors. First is the massive increase in oil movements by rail, which has increased more than three-fold since 2010. Second is the inadequate safety features of DOT-111 cars, particularly those constructed prior to 2011, which account for roughly 70 percent of tank cars on U.S. railroads. Third is the high volatility of oil produced from the Bakken and other shale formations, which makes this crude more prone towards combustion.

Of these three, rail car safety standards is the factor over which regulators can exert the most control. After months of regulatory review, on May 1, 2015, the White House and the Department of Transportation unveiled the new safety standards. The announcement also coincided with new tank car standards in Canada—a critical move, since many crude by rail shipments cross the U.S.-Canadian border. In the words DOT, the new rule:

Since the rule was announced, Republicans in Congress sought to roll back the provision calling for an advanced breaking system, following concerns from the rail industry that such an upgrade would be unnecessary and could cost billions of dollars. The advanced braking systems are required to be in place by 2021.

Democrats in Congress have argued that the new rules are insufficient to mitigate the danger. Senator Maria Cantwell (D-WA) and Senator Tammy Baldwin (D-WI) both issued statements arguing that the rules were insufficient and the timelines for safety improvements were too long.

The current industry standard car, the CPC-1232, came into usage in October 2011. These cars have half inch thick shells (marginally thicker than the DOT-111 7/16 inch shells) and advanced valves that are more resilient in the event of an accident. However, these newer cars were involved in the derailments and explosions in Virginia and West Virginia within the past year, raising questions about the validity of replacing only the DOT-111s manufactured before 2011.

Before the rule was finalized, early reports indicated that the rule submitted to the White House by the Department of Transportation has proposed a two-stage phase-out of the current fleet of railcars, focusing first on the pre-2011 cars, then the current standard CPC-1232 cars. In the final rule, DOT mandated a more aggressive timeline for retrofitting the CPC-1232 cars, imposing a deadline of April 1, 2020 for non-jacketed cars.

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DataSpotlight

The recent oil production boom in the United States, while astounding, has created a misleading narrative that the United States is no longer dependent on oil imports. Reports of surging domestic production, calls for relaxation of the crude oil export ban, labels of “Saudi America,” and the recent collapse in oil prices have created a perception that the United States has more oil than it knows what to do with.

This view is misguided. While some forecasts project that the United States could become a self-sufficient oil producer within the next decade, this remains a distant prospect. According to the April 2015 Short Term Energy Outlook, total U.S. crude oil production averaged an estimated 9.3 million barrels per day in March, while total oil demand in the country is over 19 million barrels per day.

This graphic helps illustrate the regional variations in crude oil supply and demand. North America, Europe, and Asia all run significant production deficits, with the Middle East, Africa, Latin America, and Former Soviet Union are global engines of crude oil supply.